Source: Reuters

Governments across the world moved on Monday to shore up confidence in the tottering global financial system with a slew of bank bailouts worth hundreds of billions of dollars.

The moves were designed to stave off the world’s worst financial crisis in nearly 80 years, which comes against a background of declining global economic growth to raise the threat of widespread recession.

Britain said it would spend up to 37 billion pounds ($63.95 billion) buying into top UK banks. The move will likely see the UK government becoming the biggest shareholder in Royal Bank of Scotland and lender HBOS.

The French government will also create a 40 billion euro ($54.89 billion) fund to take stakes in banks, Dow Jones Newswires said on Monday, citing a source.

Germany will launch a rescue plan including a fund to provide up to 400 billion euros ($548.9 billion) in guarantees for banks, according to a draft bill seen by Reuters on Monday.

Bank guarantees provided by the fund will run until Dec 31, 2009, the draft bill showed. Chancellor Angela Merkel is due to give further details of the rescue plan at 9 a.m. EDT.

Japanese Finance Minister Shoichi Nakagawa, meanwhile, said his country would consider guaranteeing all bank deposits if necessary, news agency Jiji reported.

“We need to stabilize and then rebuild,” British finance minister Alistair Darling said, encapsulating the motivation behind the moves.

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